I stand here today humbled, more than ever, by the task before us, grateful for the honor you've bestowed, and mindful of the sacrifices we must make to do it justice.

Twenty Americans before me have lent their names to this most eminent of prizes, among them three presidents, two sitting. Though challenged by the upheavals of fractious eras, their skill and vision hewed faithfully to the spirit of our forebears, who travelled across an ocean to seek sanctuary, and declared all who made their home there to have been created equal. Where possible, they worked to stem those tides in humankind that would drown us in the storms of violent conflict. And so we recall these efforts, and their fruits, praising Theodore Roosevelt for brokering peace, not chiding him for wielding his trademark stick to subjugate Cuba and the Philippines.

Others were inspired by a higher calling, rising above themselves to speak truths we shirk from hearing. Of these transformative figures, none was more righteous, more perspicacious, than Dr Martin Luther King, who accepted this award 45 years ago. I was surprised to be asked to follow him, and shared with you my doubts that I deserved to be doing so. But I've come here on the understanding that this ceremony is a call to action, a call for all nations to confront the challenges of the 21st century, and for America to lead.

Putting America first should not require us to put the lives of other peoples second. When our nation became mired in Vietnam, sacrificing millions to its quest to contain Communism, Dr King called us "the greatest purveyor of violence in the world". A year to the day after speaking those words, he was murdered.

As I was raised in his shadow, whirlpools of destructive logic sucked Americans ever deeper into worldwide battles. From Vietnam, the fog of war spread. We laid waste to Cambodia from the skies, before Pol Pot's brutal forces tilled its killing fields. And for the sake of defeating the Soviet Union, we armed Islamic extremists in Afghanistan, spawning a terrorist menace that defined the first decade of this century.

I do not seek to defend these actions here, or those of an earlier September 11th, when a coup hatched in Washington robbed Chile of its elected president, because he was a Marxist. Thousands "disappeared" under the market-friendly despot we supported, like so many other enemies of freedom, before and since, from the Congo to Cairo, Central Asia to Latin America, always in the name of a greater good. Ours. Whatever thwarts those who might challenge us, we can live with.

We armed Saddam Hussein to fight the Islamic Republic of Iran, ignoring his use of poison gas while it suited us. But once he'd threatened our interests by invading Kuwait, this became grounds for deposing him, though the weapons we claimed to fear no longer existed. As the last head of the Federal Reserve said, "it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil."

Whether we control it, or prevent others from doing so, this is why we care about the Middle East. Since the British Empire fell, we've guarded what our State Department called "a stupendous source of strategic power" and "one of the greatest material prizes in world history." As every Iranian schoolchild knows, but Americans rarely recall, we once overthrew their government, to ensure it kept pumping oil to our satisfaction. So hated was the regime we installed in Tehran, and so vicious its secret police, that we helped to foment an Islamic Revolution. And so we conjured enemies anew.

Rather than remain trapped in the past, I want to move forward. We are not alone to blame for the world's problems; and for all that's wrong with America, much is right. But our delusions make us a menace to ourselves, and even the civilized order we say we're defending. Americans aren't alone in being hypocrites. Nor are we by any measure the worst. Our reference points for wickedness are the tyrannies of Stalin and Hitler. However, when senior Nazis were tried at Nuremberg, it was the American chief prosecutor who said: "While this law is first applied against German aggressors, the law includes, and if it is to serve a useful purpose it must condemn, aggression by any other nations, including those which sit here now in judgment."

For much of this past American century, as in others bestridden by Empires that came before ours, the morals guiding relations between states have been those of Dostoevsky's Crime and Punishment. To quote the murderer Raskolnikov: "he who can spit on what is greatest will be their lawgiver, and he who does the most will be rightest of all." It's ugly, so we prefer to cover it up and tell ourselves stories, most often about our benevolence, or "the shining city upon a hill" we call our homeland.

When the Spanish-American war brought us to primacy, Mark Twain surveyed our impact on the Pacific. "We have pacified some thousands of the islanders and buried them; destroyed their fields; burned their villages, and turned their widows and orphans out-of-doors," he observed. "And so, by these Providences of God - and the phrase is the government's, not mine - we are a World Power."

But without our cherished myths, or the lies that led us into Iraq and Vietnam, there'd be fewer conflicts. No one welcomes war, and Americans aren't by nature belligerent people. Even our "Greatest Generation", among them my grandfather, was reluctant to join World War II until Pearl Harbor. And their fight in the name of a larger freedom has served us since as a rallying call.

There's always an axis of evil that needs vanquishing. And as Hermann Goering chillingly warned: "the people can always be brought to the bidding of the leaders." It's easy, he explained: "All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country."

I don't need to remind you that we were attacked, on American soil, eight years ago. At that moment we faced a fateful choice: whether to seek justice, or debase it. The armchair warriors won. Hundreds of thousands of civilians have died, in the name of avenging three thousand of our own. We don't even count how many we've killed.

I've said before I don't oppose all wars. I supported the pledge to hunt down and root out those who would slaughter innocents in the name of intolerance. But can we do that by killing more innocents? Where would we need to send troops? Saudi Arabia? Pakistan? Somalia? And how many corpses might convince a hostile horde to change its thinking? Before we rained destruction on Hiroshima and Nagasaki, Americans firebombed dozens of Japanese cities. Up to half a million were slain, and millions more lost their homes before surrender was so much as discussed.

As I said at the start of the decade, let's finish the fight with Bin Laden and al Qaeda, through effective, coordinated intelligence, and shutting down the financial networks that support terrorism. It's work for policemen, not soldiers; our armed forces should defend us, not attack. War by the one percent doctrine of preemption is aggression.

To repeat, I'm not here to look backwards. We're here to remember the urgency of now. This is no time to indulge in the narcissism of self-flagellation, or to take the tranquilizing drug of mass denial. A nation that believes its hype is heading for disaster. Now is the time to rise from the valley of hubris, to walk the sunlit path of accepting limits. Now is the time to obey the same rules we impose. Now is the time to admit that our actions have consequences, that we've been al Qaeda's top recruiter.

Our pursuit of "full spectrum dominance", our ambition "to hold unquestioned power", has not made the world any safer. We started a nuclear arms race, and doused it in gasoline. We helped Pakistan get the bomb, and looked away while it ran a weapons hypermarket. Now we're helping India break the rules, just as Israel has for decades while it stockpiled warheads. Exactly how many isn't clear, because Israel denies access to foreign inspectors.

Iran is the only oil-rich state in the Middle East that's beyond our influence. Together with Israel, we keep threatening to attack it. But while we talk up "the Iranian threat", our intelligence agencies say Iran halted its weapons program years ago, and wants nothing more than the option to reactivate it. The idea it could wipe Israel off the map is absurd. The Israeli nuclear arsenal guarantees that. Israel's prime minister calls Iran an "apocalyptic cult" that "glorifies blood and death, including its own". But for years the two countries were allies, and Israel accepted the rhetoric was mostly for show. Its priorities only changed when Iran became the region's number two power. And that only happened when we invaded Iraq, and installed a pro-Iranian regime.

So what do we do now to solve these problems? Bombing Iran would not bring us closer to a world without nuclear weapons. It also wouldn't make Israel more secure. I rule it out categorically, and withdraw all plans for a nuclear first strike on Iranian bunkers. Destructive power can only be tempered by restraint.

There's no longer a technological difference between the process that generates fuel and the process for building bombs. Once you can enrich uranium for reactors, it just takes time and investment to enrich it for missiles. If we're serious about disarmament, we also need to restrict enrichment by everyone, outsourcing it to an international agency. This alone makes nuclear power no answer to climate change.

It's no less misguided to pretend we can clean up coal. Plans to bury carbon dioxide are unproven, and they won't work any time soon. The global demand for energy will be hard to meet without making radical changes. If we carry on insisting that "the American way of life is not negotiable", we can hardly expect others to think differently. But we all have to, immediately, or there won't be a future to get rich in. If everyone consumed like Americans, we'd need another half dozen planets. And if the one we live on heats up as scientists forecast, much of it will be uninhabitable this century. Ice caps and glaciers will melt, seas will rise and crops will fail. Billions of people will struggle to find food and water, and the world will be full of refugees.

We're almost past the point of no return. Long-term targets are irrelevant. The gases we've emitted already will heat up the atmosphere for a century. Unless we stop adding to them quickly, we're committing ourselves to a runaway warming process, unlike any this Earth has seen for millions of years. Faced with that prospect, and the deadlocked talks on a climate treaty, there's no alternative left but to act unilaterally.

I've signed up to a British initiative called 10:10, and promised to reduce my personal emissions by ten percent in 2010. I'm also committing to bolder executive action. I pledge the United States will cut output of carbon dioxide, and other heat-trapping gases, by a tenth next year from current levels. The year after, we'll cut another tenth, and again, and again, for ten straight years, until we're free of fossil fuels by 2020.

To achieve this, we need to transform our economy, on a scale unseen since the start of World War II. Converting our factories to rearmament was what finally dragged us out of the Great Depression. To support our transition to a less destructive paradigm, America will turn itself over to sustainable energy. Trillions of dollars will be spent on a new Manhattan Project; only this one won't build an atom bomb. Instead it will share clean technology through the United Nations. There can be no solution to climate change that doesn't include such partners as India and China. Even if they burn coal, we should stop, and help them cut their carbon output however we can.

Domestically, we won't just scrap subsidies for fossil fuels. We plan to nationalise and liquidate our oil companies, and switch the nation's cars to electric power. They'll be charged from a network of wind and solar farms, hooked up to a direct-current smart grid. And we will pay for this by ceasing to arm the world.

America spends almost as much on weapons as every other nation combined. The Pentagon gets more money today than at any time since World War II. And our exports dwarf those of our rivals, creating the opponents of tomorrow. As President Eisenhower warned: "Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed."

It is time to start changing priorities. Next year, we will cut military spending in half, and shrink it as we scale back our presence. Over the coming decade, this will free up trillions of dollars. So far we've been tentative, scrapping a few costly weapons while increasing the total we spend. But an overhaul of energy policy will enable us to shut down bases overseas. No longer will we need hundreds of foreign outposts to protect resources, or the shipping lanes and pipelines that ferry them. We can leave that work to regional powers, and resume our rightful place in our own backyard.

Every last soldier will leave Iraq next year, and our bases there will be bulldozed. We will also withdraw at once from Afghanistan. A generation ago, Mikhail Gorbachev said he wanted to do the same, but he first raised troop levels above 100,000. As a result, 1985 was the deadliest year of the Soviet occupation. We will not repeat the same mistake. I'm reversing last week's announcement of escalation, and our draw down will begin from tomorrow. We can't just arm warlords and pay off the Taliban. All the money and blood we spill achieves nothing. We can only destabilize Pakistan, and the government there won't help us do that. The only constructive way forward is to face our impotence.

We cannot provide security without peace, and we cannot impose that by will, or force of arms.

We cannot build abstractions like good governance. We can only pay reparations and send aid. Afghans have to shape their own future.

We cannot defend against terrorism by bombing civilians. And even the most surgical air strikes can't stop terrorists plotting in Europe, or training in Florida.

We cannot privatize war by funneling taxpayer dollars to mercenary contractors.

Our suicide pact with militarism has to end before it bankrupts us, strategically, financially and morally. We cannot keep stalking the world creating new enemies.

No, we cannot.

Half a century ago, Eisenhower warned us what was happening. To win World War II, he said, we created "a permanent arms industry of vast proportions", and "only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals."

This is a challenge we've ducked until today. And make no mistake: it will not be easy. The military-industrial complex has no fixed address. Arms companies spread production nationwide, so Congressmen and women defend their business, for fear lost jobs will cost them votes. Other lobbies complicate things further, like those pressing Israel's case in Washington. To underline our resolve to curb the arms trade, all military assistance to Israel will be scrapped, and no sales allowed until it retreat within its 1967 borders, and dismantles illegal settlements on Palestinian land.

Capitalism has been at war with democracy, and winning. We've blown trillions in the banking casino, privatizing its gains and socializing costs. Not for nothing is Goldman Sachs called "a great vampire squid wrapped around the face of humanity." For a more sustainable world, we have to dismantle the structures that shape it.

I can't achieve that alone. We all have obligations to prevent our national priorities being perverted, as Martin Luther King understood. "A nation that continues year after year to spend more money on military defence than on programmes of social uplift," he said, "is approaching spiritual death."

The day after Dr King was killed, Robert F. Kennedy spoke of "another kind of violence, slower but just as deadly, destructive as the shot or the bomb in the night. This is the violence of institutions, indifference and inaction and slow decay."

In words as relevant now as then, Kennedy said we "tolerate a rising level of violence that ignores our common humanity and our claims to civilization alike. We calmly accept newspaper reports of civilian slaughter in far-off lands. We glorify killing on movie and television screens and call it entertainment. We make it easy for men of all shades of sanity to acquire whatever weapons and ammunition they require."

Weeks later, he was assassinated too, campaigning for the presidency, and an early retreat from Vietnam. Instead, the war dragged on, and Cambodia was mercilessly bombed. For that, and other crimes, a previous winner of this prize should face prosecution. But if Henry Kissinger stands trial some day, he shouldn't be alone in the dock. Cases can be made against presidents too, and I plead no special immunity ahead of time. I should be held to account like anyone else.

The press should never become the president's men, and the public need to organize against him, to force his hand like Martin Luther King, to collectively make change we can believe in. Together we'll enact these commitments. In themselves, they won't end violence, they won't end lawlessness and they won't end disorder either. But they'd warrant the faith you've placed in my work, and they'd leave our children a legacy of justice. And for that small measure alone, we can be thankful.